|
'Time in
the market, not timing the market' is a worthwhile
sentiment when it comes to investing. It is the time in an
investment fund that counts, not the timing of your entry. With
regular investing, you don't have to worry about trying to time the
market. If the market happens to be falling on the day your
investment goes in, you get more for your money that day. It's the
opposite when the market is rising. When you average it out you
will generally come out ahead.
By
investing regularly and reinvesting your returns you
get the benefits of compound returns. Each dollar you invest earns
a return. By reinvesting these returns, they in turn also earn a
return, compounding the returns and allowing your investment
to grow much faster.
The table
below shows how much you would earn if you invested $1000 with a
regular savings plan and a hypothetical return of 10% each year.
The left column shows varying monthly savings
amounts.
|
-
|
1 year
|
2 years
|
3 years
|
5 years
|
6 years
|
7 years
|
9 years
|
10 years
|
|
$100
|
$2,332
|
$3,778
|
$5,349
|
$8,904
|
$10,913
|
$13,097
|
$18,037
|
$20,829
|
|
$200
|
$3,578
|
$6,377
|
$9,418
|
$16,299
|
$20,188
|
$24,416
|
$33,977
|
$39,381
|
|
$300
|
$4,824
|
$8,976
|
$13,486
|
$23,694
|
$29,463
|
$35,734
|
$49,918
|
$57,934
|
|
$400
|
$6,070
|
$11,575
|
$17,555
|
$31,089
|
$38,738
|
$47,052
|
$65,858
|
$76,486
|
|
$500
|
$7,316
|
$14,174
|
$21,624
|
$38,484
|
$48,013
|
$58,371
|
$81,799
|
$95,039
|
|
$600
|
$8,563
|
$16,773
|
$25,693
|
$45,879
|
$57,288
|
$69,689
|
$97,739
|
$113,591
|
|
$700
|
$9,809
|
$19,372
|
$29,762
|
$53,274
|
$66,563
|
$81,008
|
$113,679
|
$132,144
|
|
$800
|
$11,055
|
$21,971
|
$33,831
|
$60,670
|
$75,838
|
$92,326
|
$129,620
|
$150,696
|
|
$900
|
$12,301
|
$24,570
|
$37,899
|
$68,065
|
$85,113
|
$103,644
|
$145,560
|
$169,249
|
|
$1,000
|
$13,547
|
$27,169
|
$41,968
|
$75,460
|
$94,387
|
$114,963
|
$161,500
|
$187,801
|
| This table has been based on a
hypothetical managed fund which returns 10% each year, assuming an
ongoing management fee of 1.75% and nil entry fees. All income is
reinvested. This may not be actual returns for a fund. Source:
Colonial First State |
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